Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Nov 15, 2018 23:26:52 GMT
Good work again thanks. If interest were to be compounded after the due date that would be a little bit of a help.
As I have said many times before, count every investment as a 24 month investment and only look at it after that time (As many P2P loans on other platforms are years of commitment)
By doing that and taking a holistic approach on your total investments you will always be a winner (with maximum diversification)
Nobody has yet shown me an overall loss using this strategy.
Perhaps if you have any spare time you could give us the stats for £100 invested in every loan from (£10000 pot to start) over the last 3yrs what would have been the return if returns were reinvested . 
You have to make assumptions with respect to the repayments/recovery of defaulted and overdue loans. I tried something similiar here (2nd chart, equal investment in every loan). Compound interest is a step too far for me at this stage and I think it'll be a second order effect anyway across the relatively short time period (5 years odd but very few loans in the first couple of years in comparison to the last 3 years). Thanks for link. As with all your work it shows that P2P is not for the casual investor. DDD is the way to go to get best returns (Due Dilligence & Diversification)
Should return a moderate profit Unlike past few weeks/months in the stock market unless you are very switched on.
Thanks again. Keep up the good work.
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mjc
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Post by mjc on Nov 16, 2018 5:55:54 GMT
Good work again thanks. If interest were to be compounded after the due date that would be a little bit of a help.
As I have said many times before, count every investment as a 24 month investment and only look at it after that time (As many P2P loans on other platforms are years of commitment)
By doing that and taking a holistic approach on your total investments you will always be a winner (with maximum diversification)
Nobody has yet shown me an overall loss using this strategy.
Perhaps if you have any spare time you could give us the stats for £100 invested in every loan from (£10000 pot to start) over the last 3yrs what would have been the return if returns were reinvested .
I think tony is quite right in highlighting that FS saying “This is a 6-month loan secured by a....” could make people think it was a 6 month loan, even though I am looking for a 5 year+ investment. Of course by playing the system and offloading after 4 months to some other sucker is safer. I don’t have to do this with the other platforms I use, so although diversified to typically 0.2% per loan I have 21k, or over 40% stuck in non performing loans. In 10 years or so I can show if I (or my executor) will have lost or gained. For me, I’m out. Other platforms are far better. But I’m not complaing, just making a choice, and grateful for the graphs, the info and the views expressed here.
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benaj
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Post by benaj on Nov 16, 2018 8:41:27 GMT
Good work again thanks. If interest were to be compounded after the due date that would be a little bit of a help.
As I have said many times before, count every investment as a 24 month investment and only look at it after that time (As many P2P loans on other platforms are years of commitment)
By doing that and taking a holistic approach on your total investments you will always be a winner (with maximum diversification)
Nobody has yet shown me an overall loss using this strategy.
Perhaps if you have any spare time you could give us the stats for £100 invested in every loan from (£10000 pot to start) over the last 3yrs what would have been the return if returns were reinvested .
The compound interest would be interesting, this MSE's article explains how £100 loan from Wonga becomes $14 trillion) after 7 years! I can't see anyone can pay back £1 trillion alone. I definitely prefer The current loan term on FS than other similar platforms.
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arby
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Post by arby on Nov 16, 2018 9:24:41 GMT
The following from the T&Cs is relevant:
6.4 FundingSecure does not guarantee the period of time taken to dispose of an Asset and realise proceeds for reimbursing the Investors.
6.5 FundingSecure may, at its discretion, elect to delay enforcement of the default procedures if it believes the debt will be repaid by the borrower and that, by not enforcing the default procedures, a better outcome will be achieved for investors.
However, before finding that, I came across many mentions of "6-month term", which I guess could give people the wrong impression. Also, the following items infer that recovery times could be much shorter than years:
6.2 If the Loan Term has elapsed and the balance outstanding under the Loan Agreement has not been repaid, FundingSecure , acting on behalf of the Investors, undertakes to enforce the default procedures set out in the Loan Agreement, including:
6.2.1 FundingSecure will send a letter to the Borrower explaining the process which it intends to follow in disposing of the Assets at auction at a specified date and location. The letter will be included with any statutory notice which we are required to serve under the CCA before exercising our rights to invoke the default provisions set out in the Loan Agreement. The auction date will be a minimum of 14 days from the date of such notice. The Borrower will have until the auction date to repay the balance outstanding under the Loan Agreement or to renew the Loan
Personally, I believe it's been made clear that it isn't a guaranteed 6 month term, but each to their own.
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tony
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Post by tony on Nov 16, 2018 10:06:27 GMT
It is obvious, having read many threads in the P2P forum, that P2P investors are a diverse bunch. Most platforms promote and advertise their service in a way which attracts those with little knowledge of financial matters as well as those who have professional expertise in accountancy, banking etc. The professionals understand the terminology used by the platforms far better than folk like myself who have little financial knowledge and therefore interpret some of the wording according to the dictionary. In a previous thread I quoted the dictionary definition of the word "term" which is "a fixed or limited period" which is why many inexperienced investors assume that the FS use of the word indicates that the loan will be repaid, either before or by the end of the six month term, or if not repaid, it will be defaulted . When not defaulted I think that investors are entitled to a clear explanation as to why an extension has been granted and a reassurance that FS have carefully and realistically investigated the reason why the borrower has been unable to repay and why they have concluded that the borrower will eventually meet their obligation to repay - it seems to me that little, if any, DD is carried out at this point and all that the borrower has to do is to ask for an extension in order to be offered it. I am still of the opinion that the "six month term" statement should be followed by something along these lines "This does not necessarily mean that the loan will be repaid at the expiry of the six month term because an indefinite extension will be granted if the borrower requests it" - such a statement would make the risk clear to the amateur investor.
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tony
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Post by tony on Nov 16, 2018 14:55:59 GMT
The stats page states that 80.1% of loans have been repaid as at end of October. It does not provide an indication of when loans were repaid. According to the All active and past loans page (see analysis on the thread here): - 51.9% of loans by value were repaid on/before the due date - 56.3% of loans by number were repaid on/before the due date These figures include defaulted loans but exclude cancelled loans. Correct as at 10 November. To be honest the figures are far better than I was expecting I expected the figures to be worse. I guess timely renewals are treated as repaid? So 56.3% of loans by number were repaid on/before the due date leaving 43.7% unpaid. How many FS staff members are needed to investigate why the loans have not been repaid and does FS have that number of personnel whose job it is to properly evaluate the situation? My guess is that the number is woefully inadequate resulting in a large number of extensions being granted to borrowers whose record and performance indicates that the default procedure should have been put in motion. I believe that whenever an extension is granted it is incumbent for FS to provide a meaningful explanation as to why they have gone down this route and not just making the bland statement "the borrower has paid the interest to date and the loan has been extended" or words to that effect.
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bg
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Post by bg on Nov 16, 2018 15:30:05 GMT
I expected the figures to be worse. I guess timely renewals are treated as repaid? So 56.3% of loans by number were repaid on/before the due date leaving 43.7% unpaid. How many FS staff members are needed to investigate why the loans have not been repaid and does FS have that number of personnel whose job it is to properly evaluate the situation? My guess is that the number is woefully inadequate resulting in a large number of extensions being granted to borrowers whose record and performance indicates that the default procedure should have been put in motion. I believe that whenever an extension is granted it is incumbent for FS to provide a meaningful explanation as to why they have gone down this route and not just making the bland statement "the borrower has paid the interest to date and the loan has been extended" or words to that effect. What exactly is an inadequate extension? All interest and capital is repaid to the investors in the loan so why are they due any sort of additional explanation?
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trium
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Post by trium on Nov 16, 2018 15:33:04 GMT
I expected the figures to be worse. I guess timely renewals are treated as repaid? So 56.3% of loans by number were repaid on/before the due date leaving 43.7% unpaid. How many FS staff members are needed to investigate why the loans have not been repaid and does FS have that number of personnel whose job it is to properly evaluate the situation? My guess is that the number is woefully inadequate resulting in a large number of extensions being granted to borrowers whose record and performance indicates that the default procedure should have been put in motion. I believe that whenever an extension is granted it is incumbent for FS to provide a meaningful explanation as to why they have gone down this route and not just making the bland statement "the borrower has paid the interest to date and the loan has been extended" or words to that effect. While I agree with your general sentiments I don't think FS ever take you on a compulsory extension. If the borrower has paid the interest to date the loan is typically renewed. Only lenders who have specifically selected the option to auto-renew are included, otherwise you have the option to invest again manually or bow out. I'm not aware that formal extensions are granted - not often at least - and the usual scenario is that borrowers simply don't keep to the arrangements. FS have to decide whether the best way forward is to default the loan and incur the expense of asset seizure and sale or to tolerate the borrower's tardiness in the hope that a beneficial outcome materialises. Edit - crossed with bg
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ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Nov 16, 2018 16:16:32 GMT
And the simplest, responsible, ethical and "integrous" solution is to make damn sure that, within reason, <70% LTV actually IS <70% LTV.
Then it is very easy to Default as & when appropriate and ensure that Lenders mostly get their Capital back, and Interest.
But that won't ever happen whilst the current game is so jolly for Borrowers, Introducers/Middlepersons, Valuers, ............. and The Platforms.
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tony
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Post by tony on Nov 16, 2018 19:21:58 GMT
So 56.3% of loans by number were repaid on/before the due date leaving 43.7% unpaid. How many FS staff members are needed to investigate why the loans have not been repaid and does FS have that number of personnel whose job it is to properly evaluate the situation? My guess is that the number is woefully inadequate resulting in a large number of extensions being granted to borrowers whose record and performance indicates that the default procedure should have been put in motion. I believe that whenever an extension is granted it is incumbent for FS to provide a meaningful explanation as to why they have gone down this route and not just making the bland statement "the borrower has paid the interest to date and the loan has been extended" or words to that effect. While I agree with your general sentiments I don't think FS ever take you on a compulsory extension. If the borrower has paid the interest to date the loan is typically renewed. Only lenders who have specifically selected the option to auto-renew are included, otherwise you have the option to invest again manually or bow out. I'm not aware that formal extensions are granted - not often at least - and the usual scenario is that borrowers simply don't keep to the arrangements. FS have to decide whether the best way forward is to default the loan and incur the expense of asset seizure and sale or to tolerate the borrower's tardiness in the hope that a beneficial outcome materialises. Edit - crossed with bg
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Post by df on Nov 16, 2018 19:37:27 GMT
I expected the figures to be worse. I guess timely renewals are treated as repaid? So 56.3% of loans by number were repaid on/before the due date leaving 43.7% unpaid. How many FS staff members are needed to investigate why the loans have not been repaid and does FS have that number of personnel whose job it is to properly evaluate the situation? My guess is that the number is woefully inadequate resulting in a large number of extensions being granted to borrowers whose record and performance indicates that the default procedure should have been put in motion. I believe that whenever an extension is granted it is incumbent for FS to provide a meaningful explanation as to why they have gone down this route and not just making the bland statement "the borrower has paid the interest to date and the loan has been extended" or words to that effect. I don't think FS does formal extensions. In the event of renewal quite often the interest owed for previous 6 month loan doesn't arrive on time, this delay is compensated by interest accrued for every day of delay. In the even of default, if there is any indication that borrower might be able to repay (refinancing of selling the property) FS will wait. Admin for repossessing and selling property costs a lot, which means we receive less capital back when security is sold.
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tony
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Post by tony on Nov 16, 2018 19:42:51 GMT
I think bg has mislead my post - I said that perhaps the number of staff employed by FS is inadequate to ensure that overdue loans are properly evaluated and that the necessary DD is carried out to establish whether an extension should be granted. trium refers to loans being "renewed" which is not the same as being "extended" - the opt out choice offered by FS takes care of these in so far as if the lender has indicated "not to renew" they receive their investment back together with any accrued interest. This choice is not available to the lender for extended loans and unless they sell the loan on the SM they are stuck with the loan for the duration of the extension and any others which may follow. I haven't had any renewals in my portfolio for ages but I have a hell of a lot of extended loans - in fact most of my loans have been extended.
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arby
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Post by arby on Nov 16, 2018 19:53:29 GMT
I think bg has mislead my post - I said that perhaps the number of staff employed by FS is inadequate to ensure that overdue loans are properly evaluated and that the necessary DD is carried out to establish whether an extension should be granted. trium refers to loans being "renewed" which is not the same as being "extended" - the opt out choice offered by FS takes care of these in so far as if the lender has indicated "not to renew" they receive their investment back together with any accrued interest. This choice is not available to the lender for extended loans and unless they sell the loan on the SM they are stuck with the loan for the duration of the extension and any others which may follow. I haven't had any renewals in my portfolio for ages but I have a hell of a lot of extended loans - in fact most of my loans have been extended. broadly speaking, there is no such thing as an extended loan. There are only overdue loans where FS delay forced sale proceedings, either because they believe a redemption is imminent, or because a forced sale would materially depress the achieved price, or that they want to maintain a reputation as a lender that doesn't repossess on day 1, or that it is an FCA requirement that a lender works with a borrower in default to find a solution rather than immediately repossessing. This entire thread seems to forget that last point.
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Post by df on Nov 16, 2018 22:14:46 GMT
And the simplest, responsible, ethical and "integrous" solution is to make damn sure that, within reason, <70% LTV actually is <70% LTV.Then it is very easy to Default as & when appropriate and ensure that Lenders mostly get their Capital back, and Interest. But that won't ever happen whilst the current game is so jolly for Borrowers, Introducers/Middlepersons, Valuers, ............. and The Platforms. To me "LTV's on demand" is the most misleading practice in p2p. When started investing in property loans I genuinely believed these valuations are more or less correct because they are done by professionals, didn't realise how naive I was until defaults started pouring in... Something needs to be done about it, is anyone out there regulating lending industry? p2p market is opened to retail investors and this requires more transparency. Compulsory "your capital is at risk" warning is a step in right direction, but no platform tells you that LTV/GDV figures refer to wishful thinking rather than reality.
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Post by dan1 on Nov 16, 2018 22:37:31 GMT
I think bg has mislead my post - I said that perhaps the number of staff employed by FS is inadequate to ensure that overdue loans are properly evaluated and that the necessary DD is carried out to establish whether an extension should be granted. trium refers to loans being "renewed" which is not the same as being "extended" - the opt out choice offered by FS takes care of these in so far as if the lender has indicated "not to renew" they receive their investment back together with any accrued interest. This choice is not available to the lender for extended loans and unless they sell the loan on the SM they are stuck with the loan for the duration of the extension and any others which may follow. I haven't had any renewals in my portfolio for ages but I have a hell of a lot of extended loans - in fact most of my loans have been extended. . There are only overdue loans where FS delay forced sale proceedings, either because they believe a redemption is imminent, or because a forced sale would materially depress the achieved price, or that they want to maintain a reputation as a lender that doesn't repossess on day 1, or that it is an FCA requirement that a lender works with a borrower in default to find a solution rather than immediately repossessing. This entire thread seems to forget that last point. I understand you say "broadly speaking" but FS do refer to extensions on their statistics page... I guess the issue for me is how these extensions are communicated to investors; an informal note in the Loan Updates seems insufficient somehow.
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